America's China consensus slowly unravels

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For a long time American (and Australian) thinking about China has been dominated by a broad consensus that, despite many signs of growing assertiveness, Beijing does not pose a fundamental challenge to US leadership in Asia. The argument goes that, whatever they might say, China's leaders know that its economic future is too uncertain, its political system too fragile, its military too weak and its friends too few to allow it to contest American primacy. They also know that China's own stability and prosperity depend on the regional order that only America can uphold.

Therefore, the consensus has concluded, America doesn't have to do much in response except remind everyone that it intends to stick around. Hence the 'pivot', which has emphasised declaratory statements rather than substantive actions.

But that consensus may be unravelling, at least in America. Washington's AIIB debacle seems to have sounded a wake-up call and now, in just the past week, two major reports from the heart of the US foreign policy establishment have chimed in too. Both reports argue that China's challenge to US primacy in Asia is for real, and that America's policy in Asia needs to shift radically to respond.

At first glance they offer diametrically opposed views of what that response should be, in ways that might appear to frame the debate Washington is now having about how to respond to Beijing's challenge.

In fact, as we shall see, they share a reluctance to address the real issue, and to acknowledge the real risks.

Both reports argue that China's economic rise marks a fundamental shift in the distribution of power in Asia, and that China's leaders, especially under Xi Jinping, are determined to use their newfound strength to transform the Asian order in their favour. Rudd's argument on this is particularly strong, in part because he draws on a deeper understanding of China. It reminds us that, at his best, Rudd can be a very good analyst indeed.

So what should America do? Rudd says America and China can resolve the tensions caused by China's ambitions through diplomacy. The two powers can and should negotiate in a spirit of 'constructive realism', deepening cooperation where their interests coincide while quarantining and managing the issues on which they disagree.

It's a nice idea, but Rudd's account of it evades the hard question: is America willing to deal with China in the way he proposes? His model implies a complete transformation in the nature of US-China relations so that they become true partners in regional leadership. But his prescription will only work if America is willing to deal with China as an equal, which is of course incompatible with the old model of US regional leadership in Asia.

Yet Rudd does not acknowledge this in his report. No doubt he understands that it is something his American audience will not want to hear, but until this issue is squarely addressed, America's debate about China will keep on missing the mark.

Blackwill and Tellis do not make this mistake. They say upfront that perpetuating US primacy is America's primary strategic objective, and they urge America to build up its economic, military and diplomatic position in Asia to preserve it from China's challenge. This is, in effect, a policy of containment. Any accommodation of China's ambitions is ruled out.

They are rather glibly optimistic about what this policy would require. They call for the strengthening of America's economy, military power and diplomacy to counter China's rise, and a 'geo-economic' counter-offensive against China's growing economic sphere of influence, without saying how all this might be done. This suggests they do not really understand how radically China's rise has shifted the distribution of power.

But more importantly, Blackwill and Tellis are optimistic about how China would respond. They say America could continue cooperating with China where that suits US interests, while relentlessly resisting China's ambitions to build a new regional order. Their policy prescription assumes that China will be happy to continue working with the US on these terms. In other words, their prescriptions assume what their analysis disproves: that China is not really serious about challenging US primacy after all. If that was true, America could follow Blackwill and Tellis' prescription to resist China's challenge and preserve its primacy without running the risk of disrupting its relationship with China, which is what Americans want to hear.

This brings us to point where Blackwill and Tellis converge with Rudd. Both reports evade the fact that strategic rivalry between America and China is ultimately caused by their fundamentally incompatible aims in Asia. America's primary aim is to retain leadership in Asia, and China's is to displace it.

Rudd assumes America will abandon its aim, while Blackwill and Tellis assume it will be China that steps back. Rudd at least assumes that China will also be willing to compromise, whereas Blackwill and Tellis seem to think that America need make no substantial concessions to enjoy a peaceful relationship with China.

The big risk, of course, is that neither side will be willing to make concessions, because each expects the other to blink first. That leads straight to escalating rivalry and an ever-higher risk of war. Both these reports downplay that risk, because they seem to assume China does not want to change the regional order enough to risk a military confrontation with the US.